The Ministry of Finance ("MOF") and the State Taxation Administration ("STA") have recently issued the Announcement on Renewing the Preferential Urban Land Use Tax Policy for the Land Used by Logistics Companies for Bulk Commodity Warehousing Facilities (the "Announcement").
The Announcement provides clarity in five aspects as below. First, retrospectively from January 1, 2020 to December 31, 2022, the urban land use tax on the land for bulk commodity warehousing facilities owned by logistics companies or rented will be halved based on the applicable tax standard for the corresponding class that the land fall under. Second, the meanings of "logistics companies", "bulk commodity warehousing facilities" and "land used for warehousing facilities" as mentioned in the Announcement are clearly defined. Third, the land used by logistics companies for office and living purposes and other land not directly used for bulk commodity storage are not eligible for tax reduction, and the urban land use tax on such land should be levied in accordance with relevant provisions. Fourth, the amount of tax that should be reduced but has been paid before the date of issuance of this Announcement, will be offset against the taxpayer's tax payable for the future periods, or be refunded. And fifth, to enjoy the abovesaid tax reduction policy, taxpayers shall declare the tax reduction as required and retain for future reference relevant documents including the real property ownership certificates, land use certificates and lease agreements.